On July 16, BPI submitted a comment letter to the Federal Reserve on its proposal to codify into rule a series of presumptions that the Fed proposes to use to determine whether one company has the ability to exert a “controlling influence” over, and therefore “controls,” another for purposes of the Bank Holding Company Act (BHCA). The letter commends the agency’s efforts to clarify the critical definition of control but also recommends several adjustments to the proposal to align the regulatory framework governing control more closely with Congressional intent. These recommendations include: allowing investors in another company to use contractual terms to assure that the investment complies with applicable legal and regulatory requirements and permitting investors to have larger business relationships with another company than the proposal would allow, each without triggering a presumption of control under the BHCA.
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